The interaction between the basic tools of monetary policy through interest rate and exchange rate channels; and the impact ofthem on the basic factors that represent for VN's economy

This paper determines the interaction between the basic tools of monetary policy through interest rate and exchange rate channels; and the impact of them on the basic factors thatrepresent for Vietnam's economy, namely industrial production and consumer price index. In addition, the study also...

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Tác giả chính: Le Thi Lanh
Định dạng: Conference Paper
Ngôn ngữ:English
Thông tin xuất bản: 2017
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Truy cập trực tuyến:http://siod.tdtu.edu.vn/index.php/siod/2013/paper/view/74
http://digital.lib.ueh.edu.vn/handle/UEH/56536
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spelling oai:localhost:UEH-565362017-12-20T09:26:38Z The interaction between the basic tools of monetary policy through interest rate and exchange rate channels; and the impact ofthem on the basic factors that represent for VN's economy Le Thi Lanh Monetary policy transmission Interest rate channel Exchange rate channel Industrial production Inflation Self-regression model structure SVAR Vietnam This paper determines the interaction between the basic tools of monetary policy through interest rate and exchange rate channels; and the impact of them on the basic factors thatrepresent for Vietnam's economy, namely industrial production and consumer price index. In addition, the study also considers how Vietnam's economy is affected by external factors. The study use small size vector auto regression structure model(7 variables), with data by month from 2001.M1 to 2012.M9, including 139 observations. During this period, Vietnam’ economy had many changes, such as establishing the stock market and loosening the control over the capital account transactions.This model is a modification of the small open economy model developed for the G6 economies (the G7 less the United States) by Kim and Roubini (2000). We find no evidence of the puzzles identified in previous literature, and this model provides a reasonable empirical description of important features of the Vietnam macroeconomy. Firstly, the effect of monetary policy on output is unclear and insignificant. The output of Vietnam still depends heavily on the intrinsic value. Secondly, interest rate and exchange rate channelshave small role on the domestic economy, even less than the effect of external factors (World oil price and Federal Fund Rate). Moreover, the exchange rate channelhas higher impact than interest rate. Thirdly, the study also finds an important role for the growth of money supply variable in Vietnam’s economy, especially in inflation. Finally, Vietnam, a small economy and relative openness, is now in the process of integration into the global economy, so that monetary policy is quite sensitive to foreign factors. Even the foreign elements also have a strong influence over domestic monetary policy. It also suggests that the transmission channels of monetary policy in Vietnam is not effective, because of the structure of the economy and financial depth. 2017-12-20T09:26:38Z 2017-12-20T09:26:38Z 2013 Conference Paper http://siod.tdtu.edu.vn/index.php/siod/2013/paper/view/74 http://digital.lib.ueh.edu.vn/handle/UEH/56536 en Proceedings of the International Conference "Satistics and interactions with other dipciplines, SIOD 2013" none Portable Document Format (PDF)
institution Đại học Kinh tế Thành phố Hồ Chí Minh
collection DSpaceUEH
language English
topic Monetary policy transmission
Interest rate channel
Exchange rate channel
Industrial production
Inflation
Self-regression model structure SVAR
Vietnam
spellingShingle Monetary policy transmission
Interest rate channel
Exchange rate channel
Industrial production
Inflation
Self-regression model structure SVAR
Vietnam
Le Thi Lanh
The interaction between the basic tools of monetary policy through interest rate and exchange rate channels; and the impact ofthem on the basic factors that represent for VN's economy
description This paper determines the interaction between the basic tools of monetary policy through interest rate and exchange rate channels; and the impact of them on the basic factors thatrepresent for Vietnam's economy, namely industrial production and consumer price index. In addition, the study also considers how Vietnam's economy is affected by external factors. The study use small size vector auto regression structure model(7 variables), with data by month from 2001.M1 to 2012.M9, including 139 observations. During this period, Vietnam’ economy had many changes, such as establishing the stock market and loosening the control over the capital account transactions.This model is a modification of the small open economy model developed for the G6 economies (the G7 less the United States) by Kim and Roubini (2000). We find no evidence of the puzzles identified in previous literature, and this model provides a reasonable empirical description of important features of the Vietnam macroeconomy. Firstly, the effect of monetary policy on output is unclear and insignificant. The output of Vietnam still depends heavily on the intrinsic value. Secondly, interest rate and exchange rate channelshave small role on the domestic economy, even less than the effect of external factors (World oil price and Federal Fund Rate). Moreover, the exchange rate channelhas higher impact than interest rate. Thirdly, the study also finds an important role for the growth of money supply variable in Vietnam’s economy, especially in inflation. Finally, Vietnam, a small economy and relative openness, is now in the process of integration into the global economy, so that monetary policy is quite sensitive to foreign factors. Even the foreign elements also have a strong influence over domestic monetary policy. It also suggests that the transmission channels of monetary policy in Vietnam is not effective, because of the structure of the economy and financial depth.
format Conference Paper
author Le Thi Lanh
author_facet Le Thi Lanh
author_sort Le Thi Lanh
title The interaction between the basic tools of monetary policy through interest rate and exchange rate channels; and the impact ofthem on the basic factors that represent for VN's economy
title_short The interaction between the basic tools of monetary policy through interest rate and exchange rate channels; and the impact ofthem on the basic factors that represent for VN's economy
title_full The interaction between the basic tools of monetary policy through interest rate and exchange rate channels; and the impact ofthem on the basic factors that represent for VN's economy
title_fullStr The interaction between the basic tools of monetary policy through interest rate and exchange rate channels; and the impact ofthem on the basic factors that represent for VN's economy
title_full_unstemmed The interaction between the basic tools of monetary policy through interest rate and exchange rate channels; and the impact ofthem on the basic factors that represent for VN's economy
title_sort interaction between the basic tools of monetary policy through interest rate and exchange rate channels; and the impact ofthem on the basic factors that represent for vn's economy
publishDate 2017
url http://siod.tdtu.edu.vn/index.php/siod/2013/paper/view/74
http://digital.lib.ueh.edu.vn/handle/UEH/56536
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